How oil and energy companies are adapting to the changing industry framework

Question 1: How is your company approaching the energy transition?

1. Investing heavily in low-carbon technologies and renewables. (Score: 3)
2. Balancing traditional operations with some investments in clean energy. (Score: 2)
3. Focusing mainly on traditional oil and gas operations. (Score: 1)

Question 2: How are AI and advanced technologies integrated into your company’s operations?

1. We have fully integrated AI and advanced technologies into our operations, driving efficiency and innovation. (Score: 3)
2. We are gradually adopting AI and other advanced technologies in specific areas. (Score: 2)
3. We are exploring AI but have yet to implement it widely. (Score: 1)

Question 3: How prepared is your company for future workforce challenges, including retention and technological upskilling?

1. We have a comprehensive strategy for workforce retention, upskilling, and technological integration. (Score: 3)
2. We have some measures in place, but there’s room for improvement. (Score: 2)
3. Our focus is primarily on current workforce needs, with limited planning for future challenges. (Score: 1)

In 2024, the oil and energy industry continue to manage a complex market shaped by increasing demand patterns, technological advancements, and the global push toward decarbonization. Here are some key insights and trends shaping the industry this year, providing a comprehensive understanding of its current state and future direction:

Demand and supply dynamics

The global oil market is witnessing a deceleration in demand growth, largely due to the accelerating adoption of clean energy technologies and energy-saving measures. Emerging economies, particularly in Asia, remain the primary demand drivers, with China and India at the forefront. However, advanced economies are experiencing a notable decline in oil consumption, leading to a plateau expected toward the decade’s end. Despite this, global oil supply is anticipated to exceed demand, potentially creating surplus capacity that could challenge current market strategies, especially those managed by OPEC+. For instance, OPEC+ production cuts in recent years may face renewed pressures as supply outpaces demand.

Energy transition and investments

The oil and energy industry is transforming significantly, with global energy investments projected to surpass USD 3 trillion in 2024. A surge in clean energy spending, which now eclipses oil, gas, and coal investments, underscores this shift. For example, investments in solar and wind energy have grown by 15% and 20%, respectively, contributing to lower wholesale energy prices and highlighting the need for enhanced storage and grid flexibility. While advanced economies and China dominate these investments, regions like India, Brazil, Southeast Asia, and Africa are beginning to show promising growth, though many developing economies still face challenges. Additionally, nuclear power is experiencing a revival, with strategic investments in clean energy manufacturing prioritized by major economies to secure energy independence and global competitiveness. Addressing regional disparities and infrastructure bottlenecks remains crucial for sustaining the momentum of clean energy.

Technological and strategic shifts

Integrating AI and generative AI into the oil and gas sector is poised to enhance operational efficiency and decision-making processes. Companies that effectively embrace AI, such as ExxonMobil and Chevron, are expected to generate significantly more value than their competitors. Furthermore, the industry is experiencing a wave of mergers and acquisitions (M&A) driven by robust cash flows and the strategic need to optimize operations and carbon management.

Regulatory and policy

New regulations, particularly in the U.S. and the European Union, steer the industry towards more stringent emissions reporting and operational decarbonization. These regulations will likely accelerate the adoption of low-carbon technologies and enhance transparency in emissions management, further aligning the industry with global climate goals.

The oil and energy industry in 2024 is characterized by efforts to balance traditional activities with the growing imperative to transition to cleaner energy sources. Now, let’s consider the talent management situation in each company in the oil and energy industry.

We’ve reviewed 52 companies operating within the oil & energy industry, spanning multiple global locations, including North America, South America, Africa, Europe, the Middle East, Asia, and Oceania. These companies represent a diverse range of operations within the sector, covering key departments such as exploration, production, refining, distribution, and environmental management. From major players like ENOC in the United Arab Emirates to Statoil (Equinor) in Norway and Petroperú S.A. in Peru, the analysis reflects this critical industry’s global footprint and multifaceted nature.

The companies analyzed are deeply rooted in regional and global markets, with some focusing on specific regional dominance and others maintaining a more diversified global presence. Their workforce distribution, technology integration, and strategic approaches provide valuable insight into the current state of the oil and energy sector and the challenges and opportunities it faces as it undergoes a period of significant transformation. Let’s review them in more detail below.

Workforce retention is a significant concern across the Oil and energy industry. Companies typically experience notable employee churn in December and January. This pattern aligns with the “Great Resignation” trend, in which many employees left their jobs, particularly in early 2022 and 2023.

Many employees tend to resign or transition to new opportunities at the start of the new year, reflecting a desire for change, better work-life balance, or new career prospects. This trend was observed across several companies, including Nayara Energy, QatarEnergy LNG, and Marathon Oil Corporation.

January and July stand out as periods of increased hiring. January typically marks the beginning of the fiscal year, when companies align their workforce needs with new business goals. July often coincides with mid-year evaluations and expansions, leading to a spike in recruitment.

For example, MODEC made its newest hires in January 2023, reflecting the company’s efforts to scale operations or fill roles vacated by end-of-year resignations. Similarly, Seadrill reported significant hiring in September 2022, possibly related to project cycles or new contracts.

Companies heavily rely on advanced technologies to optimize their operations, enhance productivity, and ensure compliance with industry regulations. The most used technologies include:

• Cloud computing: Amazon AWS, Microsoft Azure
• AI and data analytics: AI-driven tools, Google Analytics, SuccessFactors (SAP)
• Content management and web technologies: WordPress, Drupal, Bootstrap Framework
• Recruitment and HR management: SuccessFactors (SAP), Workday Recruit, Cornerstone On Demand
• Data and network security: Cloudflare, reCAPTCHA
• Customer relationship management (CRM): Salesforce, SAP.

The widespread adoption of cloud computing platforms like Amazon AWS and Microsoft Azure is central to these companies’ digital transformation efforts. These technologies enable companies to scale their operations, manage vast amounts of data efficiently, and deploy AI-driven analytics for decision-making. This transformation is essential for companies to remain competitive in a highly dynamic market.

AI and data analytics greatly enhance operational efficiency. Tools like Google Analytics and SuccessFactors (SAP) monitor operations in real-time, optimize resource allocation, and predict maintenance needs, thereby reducing downtime and operational costs.

The integration of AI and data analytics is also crucial for sustainability initiatives. Companies like EDP Renewables and MODEC use these technologies to track and reduce their carbon footprints. AI tools are helping these companies better manage their environmental impact, ensuring compliance with increasingly stringent global regulations.

Adopting carbon capture and storage (CCS) technologies by companies such as Statoil (Equinor) highlights a proactive approach to meeting environmental targets. As regulations around carbon emissions tighten, the ability to monitor and reduce emissions will become a critical differentiator in the industry.